Retail sales growth rebounded sharply to +1.6% m/m in March after falling in two of the previous three months. Gains were led by gasoline sales which increased by +3.5% m/m for the second month in a row, a product of rising oil prices. Auto sales were up +2.1% m/m, the first increase in three months. Restaurant sales, which are indicative of discretionary spending, rose +0.8% m/m to a strong +4.3% y/y. After stripping out volatile components, core sales, which are part of GDP, gained +1% m/m to a solid +3.5% y/y. Housing data was not so encouraging. Existing home sales fell for the fourth time in five months, pushing the y/y rate to -5.4%. Starts and permits fell for the second straight month, putting the y/y rates at -14.2% and -6.5%, respectively – a dismal performance. The only bright spot has been that new home sales gained +4.5% m/m, but it was only enough to push the y/y rate (+3%) into positive territory for the first time in seven months. Unfortunately the new home market is only about one-tenth the size of the existing home market.
